EU state aid rules undermine affordable energy prices

EEAG should guarantee industrial competitiveness

In a joint letter, addressed to the President of the European Commission, José Manuel Barroso, industriAll European Trade Union and The European Steel Association EUROFER explain that the Commission’s draft Environmental and Energy Aid Guidelines (EEAG) undermine the objectives for affordable energy prices and industrial competitiveness asset out by the European Council on 2021 March.

The draft guidelines restrict member states to exempt industry from decarbonisation or renewable surcharges. “There is no reasonable justification for limiting exemptions from the surcharges to 80% as the root for distortions on global level and within the Single Market are the decarbonisation charges, not the exemptions. Competitors within or outside the EU do not have to bear similar costs”, write Gordon Moffat, Director General EUROFER and Bart Samyn, Deputy General Secretary industriAll Europe in a joint letter to José Manuel Barroso.

The European Council asked the European Commission torapidly develop measures to prevent potential carbon leakage in order to ensure the competitiveness of Europe´s energy-intensive industries. A “clear statement” that reiterates the position of the European Steel industry, write Moffat and Samyn, and that “reinforces the effort to safeguard employment and the competitiveness of the European Steel industry”. The draft Environmental and Energy Aid Guidelines for 2014 to 2020, EEAG, is the most urgent issue for energy intensive sectors. The EU’s 2030 energy and climate framework should be based on the principle of energy supply at affordable and competitive prices.

Energy costs are one of the main factors for the global competitiveness and investment decisions in industry. Without a level playing field, energy costs contribute to de-investment in Europe and carbon leakage as a consequence. Carbon leakage occurs when there is an increase in carbon dioxide emissions in one country as a result of an emissions reduction by a second country with a stricter climate policy. So it describes the risk that companies relocate their production outside Europe due to increased costs. “The current draft is insufficient for meeting above objectives set out by the European Council”, write Moffat and Samyn in the joint letter to the president of the European Commission.

“We call upon you to take our concerns into due consideration, for the benefit of industrial competitiveness, growth and jobs in Europe”, appeal both, industriALL and EUROFER, to the head of the European Commission. The adoption of the EEAG by the European Commission is expected in early April.

Represented by EUROFER, the European steel industry represents the world leader in its sector, producing on average 170 million tonnes of steel per year with direct employment of 350 thousand highly skilled people. More than 500 steel production and processing sites in 24 EU member states provide direct and indirect employment for millions of European citizens.